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India-China conflict: Power firms nudged to exit Chinese contracts

India-China conflict: Power firms nudged to exit Chinese contracts

So far, orders for nearly 48 giga watts (GW) of thermal power generation projects have been placed with Chinese companies

Chinese companies are trying to grab a slice of the promising and lucrative Indian electricity sector across the conventional and clean energy space Chinese companies are trying to grab a slice of the promising and lucrative Indian electricity sector across the conventional and clean energy space

Amid the ongoing India-China crisis, the Indian government is mulling several strategies to leverage its growing power sector in response against China.

The wider plan comprises prodding Indian companies to consider ways of getting out of contracts signed with Chinese firms.

This extreme plan of action was enunciated by Power Minister Raj Kumar Singh at a conference with industry leaders on Tuesday.

Singh, who also helms the new and renewable energy ministry, expressed that "if possible", Indian companies shall look to explore ways to exit contracts inked with Chinese firms, as power is a critical and sensitive sector.

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"The issue of exploring the possibility of getting out of contracts inked by Indian power firms with Chinese companies was discussed in the Tuesday meeting. It is very important to use equipment manufactured in India, as power is a strategic sector," a source told the Livemint.

The strategies discussed at the meeting included ways to erect tariff barriers and other hurdles such as subsidising finance to encourage local power equipment manufacturers, and prior-permission conditions for imports from nations India is in conflict with.

The development assumes significance as India's energy demand is poised to grow from the present per capita of around 1,149 kilowatt-hour (kWh).

This is among the lowest in the world as compared to per capita consumption of 3,600 kWh globally.

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Moreover, India's electricity demand that had plunged during the lockdown period is slowly getting back to its pre-lockdown levels.

Confirming the development, a power ministry official told the news daily that during Tuesday's meeting, the power sector players and union power minister stressed on the strategic significance of the sector.

The officer added that "any malware attack on power infrastructure can lead to collapse of many other essential services that depend on power supply like communication, manufacturing, health, defence etc."

Chinese companies are trying to grab a slice of the promising and lucrative Indian electricity sector across the conventional and clean energy space.

So far, orders for nearly 48 giga watts (GW) of thermal power generation projects have been placed with Chinese companies.

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